Lacson sees potential conflict of interest in PCAB approval of DPWH contracts

Senator Panfilo "Ping" Lacson on Saturday tagged two executives of the Philippine Contractors Accreditation Board (PCAB) for supposed potential conflict of interest in approving public works contracts while sitting on the top ranks of the organization.

In a statement, Lacson named two board members of PCAB, namely Engineers Erni Baggao and Arthur Escalante, who inked government contracts as presidents of their own construction firms.

The senator name-dropped the two PCAB executives after the contractors board refuted his allegation that it has been seeking payments for the accreditation of private contractors of government projects for as low as P2 million.

PCAB has said it "has not authorized any individual, group, or third-party consultant to act on its behalf or to guarantee contractor accreditation in exchange for money."

The board has also said it is proactively addressing issues on alleged "shortcuts" for licenses being offered for certain fees.

With this, Lacson on Saturday called on PCAB to, "instead of an outright denial," should at least look into "allegations against your own people’s improper conduct."

"Aside from reports of corruption in your ranks, there is potential conflict of interest involving your two board directors in violation of RA 6713," Lacson said, referring to Baggao and Escalante.

Contractors as PCAB members

Both Baggao and Escalante are listed as board members of PCAB, an attached agency of the Department of Trade and Industry (DTI) and is one of the implementing boards in the Construction Industry Authority of the Philippines (CIAP). 

In a phone interview, Escalante said, "Wala akong nakikitang problema sa conflict of interest na sinasabi kasi kailangan contractor ka [para maging miyembro ng PCAB]."

(I don't see a problem with regard to conflict of interest because PCAB members should be contractors.)

Escalante said membership in the PCAB is "pro bono," and that the "requirement doon para ma-nominate ka, at least presidente ka ng kompanya mo… saka contractor ka for at least 10 years."

(The requirement to be nominated is that you are the president of your company... and that you have been a contractor for at least 10 years.) 

GMA News Online has also reached out to Baggao for comment, but he has yet to respond as of posting time.

Board members

The senator said Baggao was reappointed for a three-year term as PCAB board member in September 2023, "while remaining as an authorized managing officer of EGB Construction—a contractor for government projects."

Lacson, moreover, said Escalante—while sitting as a board director in PCAB—is the owner of A.N. Escalante Construction Inc.

Based on latest Securities and Exchange Commission records of EGB Construction and A.N. Escalante Construction, Baggao and Escalante are listed as presidents of the respective construction firms.

Lacson said PCAB's duties include limiting the operations of constructors to the bounds of their classifications and/or restrictions; and investigating violations of the law.

"Baggao and Escalante thus had undue advantage over other contractors, as they can investigate potential rivals, or even suspend or revoke their licenses," he said.

The senator cited Section 9 of Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials, which states that a public official "shall avoid conflicts of interest at all times" and when a conflict of interest arises, he shall "resign from his position in any private business enterprise 30 days from his assumption of office, and/or divest himself of shareholdings or interest within 60 days from such assumption."

The same law's Section 7 also mandates that public officials during their incumbency shall not own, control, or manage any private enterprise regulated or licensed by their office; nor engage in the private practice of their profession.

Violations of Sections 7 to 9 of RA 6713 shall be punishable with imprisonment of up to five years, and/or a fine of up to P5,000—and possible disqualification from public office.

Lacson said records since 2024 of the PCAB showed Baggao was a signatory to the regular contractor's licenses issued by the PCAB as one of its board members.

"But during this same time, DPWH records showed he was a signatory to contract agreements with the DPWH, as president of EGB Construction," the senator said, referring to the Department of Public Works and Highways.

He added that records also showed Escalante penned and signed a message in the PCAB's 2022 annual report as one of the agency's board members—while signing a contract with the DPWH on May 20, 2022 on behalf of A.N. Escalante Construction Inc., a company based in Davao City.

DTI probe

Lacson called on the DTI and the CIAP to immediately conduct an investigation and file the necessary criminal and administrative charges against at least two members of the PCAB Board for overlapping and conflicting positions as owners of construction companies while serving as members of the board of PCAB and bagging government contracts.

Asked if the DTI is already looking into Lacson's claims regarding PCAB, Trade Secretary Cristina Roque told GMA News Online: "Yes, there is an ongoing investigation."

The Trade chief did not give further details so as not to preempt ongoing hearings in relation to the Senate Blue Ribbon Committee's probe into the anomalous flood control projects. —VDV/KG, GMA Integrated News